Wilner: Pac-10 expansion raises many questions

Adding two teams to the Pac-10 Conference raised at least twice as many questions.

Will the 12-member league change its name? How will it split into two divisions? Will the football championship game be played at a neutral site, or on the higher-ranked team's home field? And, most important: Do the dollars add up?

Will Colorado and Utah bring enough added value to make a 12-way split of future revenue worthwhile?

After all, this entire process — the attempted raid of the Big 12, the invites to Colorado and Utah, the plans for a championship game and league-owned TV network — is all about money.

The Pac-10 presidents and chancellors hired Larry Scott as commissioner last summer because of his golden touch as CEO of the Women's Tennis Association. (He signed the WTA's landmark sponsorship deal with Sony Ericsson.)

His mission at the Pac-10: Narrow, if not eliminate, the revenue gap with the Big Ten, which generates approximately $120 million more annually than the Pac-10.

After several months of exploring options and assessing financial models, Scott concluded that expansion was the best way to increase the conference's coffers. So he invited Colorado, the only school that figured into all his expansion scenarios, and then tried to form a 16-team superconference that would include Texas and Oklahoma.

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When that bold move crumbled at the last minute — Texas opted to remain in the Big 12 — Scott went to Plan B: He invited Utah to join Colorado as the first additions to the conference in more than 30 years.

"Given the TV strategies that we plan on pursuing," Scott said, "we felt the media markets and the athletic programs (Colorado and Utah) would add significant value."

We won't know for certain until next winter, when the "Pac-12" negotiates with Fox and/or ESPN on a new television contract and makes a final decision on whether to form its own network modeled on the Big Ten's version. (Each Big Ten school receives $6 million to $7 million per year from the league's TV network alone.)

But the response from media-rights consultants to Pac-10 expansion has ranged from lukewarm to chilly.

"On a per-school basis, it's not a massive increase," said AJ Maestas, president of Navigate Sports and Entertainment Marketing, "but there's a net benefit to adding Utah and Colorado."

Maestas projects the league's per-school revenue to jump from $8 million-$9 million to $13 million-$14 million based on the new TV deals and a football championship game.

But a significant portion of that increase, he said, comes from "an inflation accelerator and catching up to their fair market price." (The league, which has a $43 million annual deal with Fox Sports Net, has been undervalued for years.)

How much of the new revenue is a direct result of adding Colorado and Utah, which bring the Denver and Salt Lake City television markets, respectively?

"Gaining Colorado is absolutely meaningless for TV purposes," said a consultant who has negotiated TV deals for college conferences. "And gaining Utah is close to meaningless."

His reasoning: Because neither school has a large national following, ESPN and FSN won't have any reason to bid more than they would for the 10-team league.

But expansion is guaranteed to open at least one new revenue stream for the Pac-10. With 12 members — and assuming the schools agree to split into two divisions — the conference meets the NCAA requirement for staging a football championship game.

That event, analysts believe, would be worth $10 million to $12 million to the Pac-10 in television rights, sponsorships and ticket sales. (The Southeastern Conference reportedly earned $14.5 million from the Alabama-Florida title game last December.)

And that's why, when asked about expansion, Scott says: "I'm absolutely confident that it's additive in terms of value."

But there was another option for the Pac-10: It could have asked the NCAA to change the minimum requirements for a football championship game. Holding the event with 10 teams would have increased the per-school revenue split.

Multiple sources, including a former member of the NCAA legislative council, said the NCAA would have been receptive to the idea. But it never got that far.

Scott said he "back-burnered" that option after becoming convinced that expansion was in the league's best interest financially. He believes Colorado and Utah will bring more to the conference than a football title game — that the schools give the league more value when negotiating with ESPN and FSN and pursuing its own TV network.